Massachusetts employers will save money on unemployment insurance under legislation signed by Governor Deval Patrick Thursday as part of a compromise to raise the state’s minimum wage.
The new law freezes unemployment rates this year at 2013 levels and lowers them slightly in 2015, 2016, and 2017. The Greater Boston Chamber of Commerce estimates that three out of four Massachusetts employers will see their costs decline by 25 percent or more. The remaining companies will experience more modest decreases.
Massachusetts currently has the fourth highest unemployment insurance cost, with companies spending on average $714 per employee.
“These savings will strengthen our competitiveness, create jobs, and lead to new economic opportunities for many,” said Paul Guzzi, Chamber president.
Business groups sought cost savings in unemployment insurance in exchange for backing off their traditionally fierce opposition to raising the minimum wage. Under the new law, minimum wage in Massachusetts will increase from $8 to $11 per hour by 2017.